Minimum Wage Policy in Great Britain and the United States

By Jerold Waltman | Go to book overview
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CHAPTER 4 THE NATIONAL MINIMUM WAGE IN OPERATION

THE POLICY MAKING PROCESS

As the National Minimum Wage (NMW) has become bedded in, a more or less regularized policy making process has taken shape. Formally, the process begins in the late summer of each year, when the Government provides the terms of reference for the Low Pay Commission (LPC). From then until early spring, the commission takes evidence and holds a number of meetings. When it completes its work, it forwards any recommendations it has to the Government, which has the option to accept or reject them. Of course, this is only the surface outline, and the actual process of formulating minimum wage policy is both more subtle and more complex.

The LPC was made a permanent statutory body in 2001. Despite this status, though, it can only be called quasi-independent at best, tethered as it is to the Government in so many respects. To begin, the Government has the power of appointment. So far, two considerations have dominated: keeping the Commission balanced and placing people of moderate views on it. Illustrative of the first principle, in June of 2000, when Bill Callaghan, the chief economist of the TUC left to become chair of the Health and Safety Commission, and Lawrie Dewar, the chief executive of the Scottish Grocers Federation, retired, they were replaced by David Coats, the head of the Economic and Social Affairs Department of the TUC, and Ian Hay, the chief executive of the Scottish Association of Master Bakers. Regarding the second, no one who has taken a strong public stance on the NMW, either for or against,

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